Identifying Neutral Technology Shocks.

Аннотация

The role of neutral technology shocks in driving business cycle fluctuations is hotly debated. Yet, we argue that there is no existing empirical methodology that allows to identify neutral shocks in the data in the presence of input heterogeneity in the aggregate production function. We develop a method that identifies a neutral technology shock based on the result that it is the only shock consistent with balanced growth properties.